Nimish pratap singh, Lucknow V. Income Tax Officer-1(2), Lucknow

ITA 466/LKW/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 4859 (ITAT-LUCKNOW)
• Duration Of Justice: 6 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-01-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 18-01-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 06-07-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: SWATI KHARE
• Keywords: Unexplained investment; Sale consideration of property below Jantri Value; Capital asset
• Section: 54B; 50C; 2

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH A, LUCKNOW BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER ITA NO.466/LKW/2015 ASSESSMENT YEAR:2009-10 INCOME TAX OFFICER-1(2), LUCKNOW. VS SHRI NIMISH PRATAP SINGH, 13/60, INDIRA NAGAR, LUCKNOW. PAN:APEPS6021G (RESPONDENT) (APPELLANT) SHRI B.P. YADAV, COST ACCOUNTANT APPELLANT BY SMT. SWATI KHARE, D. R. RESPONDENT BY 30/12/2015 DATE OF HEARING 14/01/2016 DATE OF PRONOUNCEMENT O R D E R PER A. K. GARODIA, A.M. THIS IS ASSESSEES APPEAL DIRECTED AGAINST THE OR DER PASSED BY LEARNED CIT(A)-I, LUCKNOW DATED 20/03/2015 FOR THE ASSESSME NT YEAR 2009-2010. 2. GROUND NO. 1 IS AS UNDER: 1. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS )-L, LUCKNOW (HEREINAFTER REFERRED TO AS THE LD. CIT(A) ERRED ON FACTS AND IN LAW IN CONFIRMING THE ACTION OF THE LD. A.O. IN NOT ALLOWING THE BENEFIT OF THE INVESTMENT OF RS.6,91,120/- FOR THE PURPOSES OF EXEMPTION U/S 54B OF THE I.T. ACT, 1961. 3. IT WAS SUBMITTED BY LEARNED A. R. OF THE ASSESSE E THAT BOARD CIRCULAR NO. 359 DATED 10/05/83 IS AVAILABLE ON PAGE NO. 90 OF THE PAPER BOOK AND THIS CIRCULAR IS IN RESPECT OF SECTION 54E OF THE A CT AND IT IS SPECIFIED IN THIS CIRCULAR THAT IF THE ASSESSEE INVESTS THE EARNEST M ONEY OR THE ADVANCE RECEIVED IN SPECIFIED ASSETS BEFORE THE DATE OF TRA NSFER OF ASSET, THE AMOUNT 2 SO INVESTED WILL QUALITY FOR THE EXEMPTION U/S 54E. HE FURTHER SUBMITTED THAT IN THE PRESENT CASE, THE DISPUTE IS REGARDING DEDUCTION/EXEMPTION CLAIMED BY THE ASSESSEE U/S 54B AND IN THE PRESENT CASE ALSO, THE REQUIREMENT IS THAT THE INVESTMENT SHOULD BE MADE W ITHIN TWO YEARS FROM THE DATE OF SALE OF THE ASSET BUT THE INVESTMENT IN THE PRESENT CASE WAS MADE BY THE ASSESSEE BEFORE THE DATE OF SALE BUT SU CH INVESTMENT WAS OUT OF ADVANCE RECEIVED BY THE ASSESSEE. IN THIS REGAR D, HE SUBMITTED THAT THE RELEVANT BANK STATEMENT IS AVAILABLE ON PAGE 88 OF THE PAPER BOOK AND IT CAN BE SEEN THEREIN THAT ADVANCE OF RS.5 LAC WAS RE CEIVED BY THE ASSESSEE ON 22/08/2007 AND 23/08/2007, RS.2.50 LAC ON EACH D ATE AND THEREAFTER, THERE IS WITHDRAWAL OF RS.6.90 LAC MADE ON 27/08/20 07. HE ALSO SUBMITTED THAT THESE TWO AMOUNTS OF RS.2.50 LAC DEPOSITED IN THE BANK ACCOUNT OF THE ASSESSEE IN AUGUST 2007 WERE RECEIVED BY THE ASSESS EE FROM THE BUYER AS ADVANCE AS CAN BE SEEN IN THE COPY OF SALE DEED DAT ED 20/09/2008 AVAILABLE ON PAGES 4 TO 36 OF THE PAPER BOOK. IN PARTICULAR, OUR ATTENTION WAS DRAWN TO PAGE NO. 29 AND 30 OF THE PAPER BOOK WHERE THIS FACT IS NOTED. HE ALSO SUBMITTED THAT IT IS NOTED BY CIT(A) ON PAGE NO. 4 OF HIS ORDER THAT DATE OF PURCHASE OF 1.050 HECTARE OF LAND OF RS.6,91,120/- IS 01/09/2007. HE SUBMITTED THAT THIS INVESTMENT OF RS.6,91,120/- WAS MADE OUT OF WITHDRAWAL OF RS.6.90 LAC FROM BANK ON 27/08/2007 AND THEREFOR E, AS PER THIS BOARDS CIRCULAR, THE ASSESSEE IS ELIGIBLE FOR DEDUCTION U/ S 54B IN RESPECT OF THIS INVESTMENT ALSO. HE ALSO PLACED RELIANCE ON A TRIB UNAL ORDER IN THE CASE OF RAMESH NARHARI JAKHADI 41 ITD 308, COPY AVAILABLE O N PAGE NO. 91 TO 95 OF THE PAPER BOOK. 4. LEARNED D. R. OF THE REVENUE SUPPORTED THE ORDER S OF THE AUTHORITIES BELOW. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FI ND THAT AS PER THE PROVISIONS OF SECTION 54B, DEDUCTION IS ALLOWABLE I N RESPECT OF INVESTMENT IN 3 AGRICULTURAL LAND WITHIN A PERIOD OF 2 YEARS AFTER THE DATE OF TRANSFER OF LAND. IN THE PRESENT CASE, IT IS ADMITTED POSITION THAT T HIS INVESTMENT ON 01/09/2007 IS BEFORE THE DATE OF TRANSFER OF LAND B UT THIS IS ALSO TRUE THAT OUT OF THIS INVESTMENT OF RS.6,91,120/-, THE ASSESS EE HAS USED AN AMOUNT OF RS.5 LAC RECEIVED BY THE ASSESSEE IN ADVANCE IN RES PECT OF TRANSFER OF LAND WHICH HAS TAKEN PLACE ON 20 TH SEPTEMBER 2008. NOW UNDER THESE FACTS, WE EXAMINE THE APPLICABILITY OF THE TRIBUNAL ORDER REN DERED IN THE CASE OF RAMESH NARHARI JAKHADI (SUPRA). IN THIS CASE, THE TRIBUNAL HAS CONSIDERED THE BOARDS INSTRUCTION NO. 359 DATED 10/05/83 ISSU ED BY BOARD IN CONNECTION WITH RELIEF U/S 54E AND AFTER THAT, IT W AS HELD BY THE TRIBUNAL THAT THE BENEFIT OF THIS CIRCULAR SHOULD BE EXTENDE D TO THE ASSESSEE COVERED BY SECTION 54B ALSO AND IT WAS HELD THAT INVESTMENT MADE EARLIER TO THE DATE OF TRANSFER OUT OF THE EARNEST MONEY SHOULD BE CONS IDERED TO FALL WITHIN TWO YEARS TIME LIMIT PERIOD AND DEDUCTION U/S 54B SHOUL D BE ALLOWED. BY RESPECTFULLY FOLLOWING THIS TRIBUNAL ORDER, WE HOLD THAT IN THE PRESENT CASE ALSO, THE ASSESSEE IS ELIGIBLE FOR DEDUCTION TO THE EXTENT OF ADVANCE MONEY RECEIVED BY THE ASSESSEE FOR SALE OF ITS LAND WHICH IS RS.5 LAC OUT OF TOTAL INVESTMENT MADE BY THE ASSESSEE ON 01/09/2007 OF RS .6,91,120/-. GROUND NO. 1 IS PARTLY ALLOWED AND THE ASSESSEE GETS RELIE F TO THE EXTENT OF RS.5 LAC AS AGAINST THE CLAIM OF THE ASSESSEE AT RS.6,91,120 /-. 6. GROUND NO. 2 IS AS UNDER: 2. THE LD. A.O. ERRED ON FACTS AND IN LAW IN DIREC TING THE ASSESSING OFFICER TO TAX RS,4,86,072/- AS UNEXPLAIN ED INVESTMENT U/S 69B OF THE ACT WITHOUT APPRECIATING THE FACT THAT THESE INVESTMENTS WERE MADE OUT OF DISCLO SED SOURCES OF THE ASSESSEE AND HIS FAMILY. 7. IT WAS SUBMITTED BY LEARNED A. R. OF THE ASSESSE E THAT THE BALANCE SHEET OF THE ASSESSEE AS ON 31/03/2009 IS AVAILABLE ON PAGE NO. 82 IN WHICH THE ASSESSEE HAS SHOWN DRAWINGS OF RS.4,07,020/-. HE SUBMITTED THAT THIS 4 DRAWING WAS USED FOR THE PURPOSE OF MAKING INVESTME NT IN LAND AND THEREFORE, CIT(A) IS NOT CORRECT IN SAYING THAT OUT OF INVESTMENT OF RS.6.15 LAC, THE ASSESSEE COULD EXPLAIN THE SOURCE OF INVES TMENT TO THE EXTENT OF RS.1,28,928/- ONLY BEING AMOUNT OF CASH IN HAND AS PER THIS BALANCE SHEET. 8. LEARNED D. R. OF THE REVENUE SUPPORTED THE ORDER S OF THE AUTHORITIES BELOW. 9. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FI ND THAT IN THE BALANCE SHEET AS ON 31/03/2009, THE CASH IN HAND IS SHOWN BY THE ASSESSEE AT RS.1,28,928/- AND BENEFIT TO THIS EXTENT HAS BEE N ALLOWED BY CIT(A) ALSO AS EXPLANATION OF THE SOURCE OF INVESTMENT OF RS.6. 15 LAC. NOW OUT OF THE BALANCE AMOUNT OF RS.4,86,072/- FOR WHICH DIRECTION HAS BEEN GIVEN BY CIT(A) TO THE ASSESSING OFFICER TO MAKE ADDITION AS UNEXPLAINED INVESTMENT U/S 69B, WE FIND THAT THE AMOUNT OF RS.4,07,020/- S HOWN BY THE ASSESSEE AS DRAWING SHOULD ALSO BE CONSIDERED FOR THIS PURPOSE AFTER REDUCING REASONABLE AMOUNT ON ACCOUNT OF HOUSE HOLD EXPENSES . WE FIND THAT THE BALANCE SHEET OF THE ASSESSEE FOR THE YEAR ENDING A S ON 31/03/2010 IS AVAILABLE ON PAGE NO. 83 OF THE PAPER BOOK AS PER W HICH THE ASSESSEE HAS SHOWN DRAWING OF RS.36,000/- ON ACCOUNT OF HOUSE HO LD EXPENSES. IN OUR CONSIDERED OPINION, THIS MUCH DRAWING IS FOR HOUSE HOLD EXPENSES IN THE PRESENT YEAR ALSO AND IF WE EXCLUDE THIS AMOUNT OF RS.36,000/- FROM TOTAL DRAWINGS OF THE ASSESSEE IN THE PRESENT YEAR OF RS. 4,07,020/-, THE BALANCE AMOUNT OF RS.3,71,020/- SHOULD BE CONSIDERED AS UTI LIZED IN INVESTMENT IN LAND OF RS.6.15 LAC. HENCE, OUT OF THE TOTAL AMOUN T OF UNEXPLAINED INVESTMENT COMPUTED BY CIT(A) OF RS.4,86,072/-, WE ALLOW RELIEF OF THIS AMOUNT OF RS.3,71,020/- AND CONFIRM THE BALANCE ADD ITION OF RS.115,052/- BECAUSE NO ARGUMENT HAS BEEN ADVANCED IN RESPECT OF THIS BALANCE AMOUNT. GROUND NO. 2 IS PARTLY ALLOWED. 5 10. GROUND NO. 3 IS AS UNDER: 3. THE LD. A.O. ERRED ON FACTS AND IN LAW IN NOT C OMPUTING THE VALUE OF SALE CONSIDERATION FOR THE PURPOSES OF SECTION 50C OF THE L.T. ACT, 1961 AT THE CIRCLE RATE PREVAI LING AT THE TIME OF AGREEMENT TO SALE ENTERED INTO BETWEEN THE APPELLANT AND THE PURCHASER. 11. THIS GROUND WAS NOT PRESSED BY LEARNED A. R. OF THE ASSESSEE AND HENCE, THE SAME IS REJECTED AS NOT PRESSED. 12. IN THE RESULT, THE APPEAL OF THE ASSESSEE STAND S PARTLY ALLOWED. (ORDER WAS PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTION PAGE) SD/. SD/. (SUNIL KUMAR YADAV) ( A. K. GAROD IA ) JUDICIAL MEMBER ACCOUNTANT MEMB ER DATED:14/01/2016 *SINGH COPY OF THE ORDER FORWARDED TO : 1.THE APPELLANT 2.THE RESPONDENT. 3.CONCERNED CIT 4.THE CIT(A) 5.D.R., I.T.A.T., LUCKNOW ASSTT. REGISTRAR